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.zS UNITE"D C' AM .CCITIO 7HSLA ;D

I anm leased to be here to open your Annual Confe rence.

Your association is a most valua!hie forum for marshalling andexchanc-in7 vi ews at a time whl-en exp-;ertise andi manaaenment skillsare SO central to the cmpetitiveness of rural indust ries.

1.979-80 has been an eventful year for the livestock indust-ries;and we mee-,, for tile fIrst tim-e th-is dJecade, With signifrc*-antach-'ievements .beh-Lnd us i.n the rural sector.

Cf course, recently, thJesC I ardI--T.,on achievements nave beensorel tested by drourI-h -;ch n the history of -%ustra'-ak sac- culture, ha-js a lwa vs hee n a re cu *ri*n c th a.

A Ndr b-ca-use of the unccrtai.nty and financial priessure createdlfor farm-ers by Austra)l i.a' s unre-iable. cli m;te ther Govenmenacepts a continuinog co;;imitment to provide funds to SZ:Lteslor r-2Lief from natural dis..qsers.

zor e~2r ,in 1977-78, the mwat oenet~o e32. ii to the S LaLes 17o rel F f fr om crou 7ht an in

19U 75"- in i mproved con-I.I L r 5 i1 o

Because the battle to coinit-oi i' tfefct of dr": cni~nis an,- o7--oGic one for th utainfarmer,, i annou-cecd on.-1.4 Aioril a seriLes OF 7,overnmen 'n-asures design7,ed ecua

tne Ce~ei~n~r-"r of c nrcs1 sae strorag;e f ac ite an: wt CreiulaIonC1 systems.

As a rsi:of these 2 r~r o a: nimc~tc add new b-.ores :is, irrigatiLon and' da.-s

to taelr faciLt C omb a t CI r-i. hr.

F'ormerl-1v, Ctha expend ltu-re ;7.'v'rI -n th's ILI 1.col

Fe e all Sc i-an Ltu re w .l -ir a I c!7 LCdei.-tio )r Laxaition niirp-osz-:.e i the Ner r I: .S

iLncurred.

new-. faciic es, 1r.: p-e-.u 0.as depeil e ve the coursac;.of isl.n

Anc' thaos e i~m led l r ifor -Lhei vsnn ~1O.C

thle s ions thtat hae e n~~ued

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Farmers who take advantage of tLe new policy will be increasingtheir abLlity to withstand extnc:cd dry conditions

Such measures represent, for Aus:tralian farmers, a long-terminsurance policy against water shortages in the future; and a

long-term encouragement for the imorovement of Australia's farms.

Our entry as a nation into the new decade has been marked bya welcome improvement in our economic health; and an increasing

world demand for supplies of food from the handful of worldnet food exporters.

Because crop failures, from time to time, place varying andsometimes extreme pressure on these food supplies, opportunitieswill always exist for efficient producers who can meet worlddemands.

are entitled to be optimistic about this prospect becausewe have had many efficient lower cost industries which will

enable us in the 80s to be among the better performers in the

world scene for commodity producers.

Our efficiency will enable us to meet any emerging difficulties.

For there are signs of deterioration in the international economy.

At the heart of this has been a dramatic rise in the price

of oil by 125 per cent since the end of 1978.

The deterioration in the world oil situation has created the

risk of oil shortages in the longer term for many countries.Only energy efficient nations will be able to minimise disruptionto their economies. Parity pricing for oil is essential if

we are to conserve scarce oil reserves, and if we are to encouragealternatives to the use of oil.

In the light of these demands, our oil parity pricing system,

far from being a problem for Australia's energy users is, in

fact, the only policy which can offer a long term solution.to their needs. Ventures like the giant Rundle shale oil projectwould not be viable without the incentive provided by parity

pricing. Yet now, in the light of recent announcements by the

joint venturers, Rundle could come on stream as the suppliesin Bass Strait run down. Without these developments, we risk

becoming beggars for fuel in the late 1980s.

We would not then be paying, as we are today, the lowest worldprice. Rather, we would be at the mercy of spot prices, prices

whic. h cash in on factors of limited supply and unlimited demand,factors which we must seek to avoid now.

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In an energy scarce world, wxe 1iv@ in a privileged positionof relative energy abundance. Uc must match that position ofprivilege with a sense of resoonsiblhty for the energy needsof the generations of Australl-ns who follow us. I am mi.ndfulof the short-term ffect parity :rici.n has on rural producers,hut I bel.ieve it is the only res:onsible course to secure the

utCure energy needs of all Austral. i.ans. Even with pari*y or icingfor oil, the price of super petrol in ,ustralia at 32 centsa litre is amongst the cheapest in the western world, on apar with the U.S.A. and com-parinz more than favourably Neth NewZealand at 45 cents a litre; Germany at 59 cents: at 68cents; Japan at 66; the Nethei.and-!s at 68, Italy at 72; andFrance at 75 cents a litre.

Nonetheless, the latest oil crisis has contributed to a numberof key countries passing through a stage of accelerating inflationiand rising interest rates.

In the 12 months to March 1980, inflation in the U.S.A. rose

by over 4- percentage points from about 10% to nearly

In the same period, inflation in the U.K. rose from under to almost 207, and the avera e inflation rate for OECD countriesrose by over 4 percentage points in the same period.

It is a measure of the success of our Government's policies thatin the year to the March Quarter, Australia's inflation raterose by a little over 2 percentage points from just over 8%to 10%; more than 2 percentage points below the OECD average.

This means that the American farmer is not only facing hi.gherinflation than his Australian counterpart; but also, the costsinduced by that inflation have accelerated.

,hile farm unit costs in Australia are expected to increaseby 10' in 1979-80; in the USA for example, they are expectedto rise by 14%, and in New Zealand by 167.

This serves to emphasise our international advantage and thisadvantage has been hard-won. Our challenge in the decade ahead,is to continue to keep our economic balance.

To achieve this, we must use all the economic weapnons at ourdisposal restraint in public expenditure; reduction of theSudget deficit; responsible monetary policies and increasingresistance to excessive wage increases.

.e also need to be competitive enouvJ and flexible enough toexpand our existing markets; to r2-enter old ones and to penetratei.nto new ones.

And we will achieve all these thns whl.le the Covern:.ent cont nuto create the economic clirnate and rovide the incentive inwhich the expansion of Australi a's i.ndustry can occur profitably.

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In spite of the difficult world economic environment, we can

claim considerable success on all these fronts.

In absolute terms, and relative to the achievements of our

major trading partners, our success against inflation has been

noteworthy.

Our production costs are down with the result that our

international competitiveness has been substantially improved.

It is because of this position of growing economic strength

that the Government's negotiations to achieve increased access

to overseas markets has met with such success.

The major forum for these negotiations was the recently concluded

Multilateral Trade discussions.

There are, of course, on-going bilateral deliberations.

But through the MTN negotiations, Australia has secured improved

access to the European and United States' markets; and has

secured new commitments from the Japanese.

The Government's policy has been to fight for a reduction of

restrictive barriers which deny full justice to the efficient

producer and inhibit world trade.

This problem is particularly acute with the E.E.C.

But the Government has been successful in securing an improvement

in access for Australian exports to the European market. Under

the "ITN arrangements concluded last year, there will be a useful

but somewhat modest increase in access to the EEC for beef

from Australia.

W'e will benefit from a new Australia only quota, levy-free,of 5,000 tonnes of high-quality beef.

1!e wi,ll also benefit from arrangements for increased access

for beef for 'direct consumption under the GATT levy free quota.

And in addition, our expectation is that the EEC will increase

access for all countries supplying frozen beef for m.nufacturing.

Other zains include a 2,250 tonne levy free quota per annum

for frozen buffalo meat and tariff concessions on offals, meat

e-,tracts, dried fruits and certain canned fruits.

CO.r discussions with the EEC are continuing in an atte:-t. to:.orove market access for Austral-::in products.

In AnriL, Minister .al discussions :wecre held in Canberra with

the V.ice-PresLdent of the EEC Commission, in the first of a

series of regular annual consultations at Ministerial level

between Australia and the Eurobean Economic Community.

The atcc ofthese cons ul -atons was good, addisusson

T'ne Cc-miss szEo-ne-c was, however, left in no doubt_)_ as tothe io~we attach~oo to obtainingc reasonable access to t_-he Cormunitv

ior oui:r primary products and to moderation of the sDracti-ce of dlumning its heavily suhsidised. rural. surpLus on third

Our egoiatonswith the U.S. have nroduced sati-sfactory resultsin ter-,-s. of: access.

Tnve euaranteed a minimum access level f or al obal b,,eef aotoE: 1.2 Illi 4on pound s per annum

is ith'e first time such a guarnioe has been given.

.kn' 1. s 2ew e n orm all1y -s upvI an ro imaey hal o f thIe ar c a r-a~e t. Astralian boeef corrsrenow better able to Dolarn

Cor ;7r f.ture on th -e ba-7sis of aj ti.r7 and! jredictableexo

Io-w vLl the American unor eef tan, be turned, on an-40:

be e~ ner su cc esf ul In s e cuiJ.ng a r e(.Iu c tio n .S.r22: :ro. "S 3 cents a sudto U.S. 2 cents a -c'undC. .hc

ex'o o yield an extra r: ilo n t o S7 mi-i11on t--o Al sr a I a s

or Tefirst time [or many decades US dutIY on ra-q woolis0 ~v~dby 60". over a 3 year period.

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These initiatives, in support of Australia's rural industries,are further improved by our expectation that Japanese beef importsare to increase steadily over the next two years and to reach apeak 142,000 tonnes in 1983.

These successes in securing guaranteed access to overseas markets,especially for our beef, take us a long way from the impoverishedLabor years.

In 1974-75, the Labor government, ignoring the fundamental stabilityand basic insurance for the beef industry, provided by secure accessto markets, for 15 months ignored Australia's total exclusion fromthe Japanese beef market.

It has been our determination since that time, that this should neverhappen again to such a vital rural industry. It has been ourdetermination that never again should prosperity be sacrificedby a lamentable indifference of government to the needs of rural

S industry.

It is a tribute to the resilience of the rural sector and itscapacity to take advantage of an encouraging economic climatethat the recovery from the trough of 1974-75 has been so commanding.

In order to secure this recovery, the Government has acted, sincewe ca.'e to office, to assist rural industries overcome theuncertainty of the financial pressure that arises from variableweather conditions and fluctuating commodity returns.

We believe that rural industries in Australia require a specialunderstanding from governments an. special measures whichminimize the consequences of adverse conditions.

To improve the long term viability of rural industries, theGovernment has modified the tax averaging provision; establishedthe Primary Industry Bank of Australia which has already approved$210 million to 3,000 borrowers; introduced in full the fuel price

Sequalisation scheme which will benefit people in country areas byover $120 million in 1980-81; created the income equalisationdeposit scheme; abolished federal death duties; introduced acomprehensive rural adjustment scheme; provided specialdepreciation provisions for buildings and for the storage ofhay, grain and fodder; and recently announced the introductionof new taxation concessions to assist in increased water storage.

To assist specific industries, the Government has increased thewool floor price from $2.50 in 1975-76 to $3.13 per kilo in 1979-80,and given a commitment that i L- wil be at least this level in1980-81; introduced nev; wheat marketing arrangrements whichstabilise returns and facilitate earlier payment cor wheatdeliveries; provided assistance to beef producers during therecent beef recession; underwritten prescribed dairy products;renegotiated the Commonwealth-State sugar agreemrent with theQueensland government to provide an improved system for feedingdomestic sugar prices; and helped fund a wider range of industryresearch programmes.

The Government's dedication to economic growth, its determinationto secure international competitiveness, its.success in increasingaccess to overseas markets, and its willingness to provide incentiV.:s

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to Australia's farming cormmunity all these have created a newbuoyancy for rural industries.

Real income per farm more than doubled in the year ended June 1979and has been approximately maintained this year.

The gross value of rural production this year is estimatedto be more than 60% higher than the level of two years ago.

And the value of rural exports is estimated this year to bealmost 60% above the level of two years ago.

Across a wide spectrum of industries, current performanceaugurs well for the future.

For livestock producers, I know that central and northern areasof Queensland are carrying a fair to good body of nature feed,and will enter the winter period in fair shape.

The rural problem areas in Australia are southern Queensland.and many parts of inland New South Wales.

I know that many of your members in southern Queensland are

facing a very grim winter and that the need for agistment is

very real indeed.

Drought, of course, is much tougher when it coincides withpoor export returns.

Fortunately, the market basics are sound for Australia's ruralindustries, although I know that the faltering US economy iscasting a shadow over the beef trade.

However, beef prices in recent weeks have shown encouragingsigns of firming.

The sheep meat industry has also enjoyed strong prices at auction.

Sales to the high growth Middle East countries have expandedstrongly, as have live sheep exports. There is, ho<w.ever, aproblem emerging for the Australian sheep meat industry in the1980s. Only last Thursday, European agriculture ministers agreedto most of the details of a common agricultural policy on sheepmeat. The fear 'is that, like other EC regimes, this agreemzntwill lead to a squeeze on imports, subsidised EC exports, orto both. And this obviously would have adverse affects on Australia.

The decision is a most serious matter.

Up until Europe has represented a worthwhile :-r?.ret forAustralia w.hich could be threatened in the future by this decision.But a further danger lies in. t-e very real prospect of our havingto compete In the import Middle East markets with subsidisedconmunity exports.

The Governn.nt believes that it is essential to reach ag.reementwith the EEC on their understanding of their possible futuredevelopments on trade in third markets.

It is our determination to ensure that agreement is reachedwith the EEC on a level of access to Europe which protects

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our traditional level of sheep meat trade in that market. Prospectsin the wool market are highlighted by a concensus about anunderlying strength in wool demand.

There is reason, in a world where the cost of producing syntheticfibres is rising sharply, to expect sound, longer run prospectsfor this industry.

This is borne out by the fact that auction prices so far thisseason have been 18% above the 1978-79 average.

Although the wool corporation has increased its market supportactivities in recent months, its stockpile is still very lowby historical standards, and is over 100,000 bales less thanat the close of last season.

The outlook for wool in the next financial year is a good one,and it has already been announced that the floor price for thatyear will be at least at the current level.

It is unlikely that this new floor will be announced before theend of the current season. But there may be sound reasons for itincreasing.

In the wheat -industry, apart from the problems created bydrought conditions in some areas, the position is encouraging.

In this financial year, wheat exports are expected to be doubleany previous level, at a record $2.2 billion.

On current forecasts, wheat will be Australia's largest singleexport significantly exceeding -wool and coal.

This has arisen from strong world demand, and the fact that thearea planted with wheat has increased markedly in recent years;and the 1980 crop is generally off to a good start.

I appreciate that an issue of particular concern to farmers,especially grain growers, is that supportive action taken by theAustralian Government to the United States response to the Sovietinvasion of Afghanistan.

I anhounced on 9'January 1980 that Australia would support theUS action of embargoing 17 million tonnes of grain to the USSRby not picking up any shortfall created by the US decision.

Consistant with the US decision, of course, normal sales wereallowed to continue, so that shipments under existing contractscontinued unaffected.

Ho..ever, we closely examined new contracts in grain to ensurethat our commitment was being fulfilled.

In doing so, two proposed sales of sorgum and one sale of maizeto the Soviet Union were prevented from going ahead, providingan important contribution to Australia.'s stance onthis critical,international issue.

In regard to future policy on grain sales to the Soviet Union,you will be aware that the Government recently conveyed to thegrain marketing board its interimn decision that exporters of course

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grains could now contract for up to 25% of last year's crop, providedthey can demonstrate to the Government that they traditionalilyenter into forward sales contracts at this time of the year.

However, the Government still views the Soviet invasion ofAfghanistan seriously indeed.

We wish to continue our policy of full support for the US.But the Government is concerned to clarify completely thepolicies of major grain exporting countries in relation to1980-81.

Following the recent Brussels meeting, it is now apparentthat there are some issues on which further clarification isrequired.

As a result, Peter Nixon will leave tomorrow for top'leveltalks in Washington and Ottawa with the US and Canadiangovernments.

One of the real successes amongst rural industries in recentyears has been the dairy industry.

With government help, it has achieved one of the mostremarkable, if difficult, readjustments in Australia's agriculturalhistory.

The industry is now somewhat smaller than it was a few years ago,but productivity and incomes have risen considerably as a resultof the industry's increased competitiveness and its success insecuring new markets.

Another vital industry enjoying a significant recovery fromrecession is the sugar industry.

During the last few months, world free markets sugar priceshave risen to the highest level since 1974.

With production and export restrictions now lifted, prospectsfor the industry are indeed promising. However, there remainsone notorious practice which affects the viability of allefficient rural industries the dumping-of subsidised agriculturalproducts on world markets.

We have persistently argued in the European Community that thecosts to be borne ihternationally by government subsidiesand protectionist devices has reached a level which is not inthe community's best interest or in the interest of moreefficient producers.

It is of little benefit t:o industrialised nations to tax thecommunities heavily, to oay for subsidised goods whose overproduction leads to dumping.

And it is of no benefit to efficient economic producers andexporters who are denied markets and are unable to fully developlow cost industries which will provide reasonably priced food,on a sustainable basis, not subject to political interference.

We believe that our approach is eminently reasonable.

We have simply urged modification of the EEC policy sothat the Community's excessive practice of dumping onworld markets is moderated.

The Government's success at improving our access to existingmarkets has been complemented by our development of newmarkets.

The liddle East has now become our largest market for livesheep and sheep meat, and is an important customer forAustralian dairy produce.

The Chairman of the Australian Wheat Board, Sir Leslie Price,co-mented recently that the Middle East is our most rapidlyexpanding wheat market.

In 1979, the Wheat Board shipped 3.5 million tonnes to theMiddle East, and the figure could rise to 5 million tonnesin 1980, or nearly 40% of Australian wheat exports.

The Asian market has also become much more important for ourrural export industries, with rising sales in grain, meat. anddairy products.

These developments augur well for the future.

The current strength of the Australian economy; the underlyingincrease in world food demand; the vigorous and successfulattempts by exporters and the Government to expand our markets;all these have established the foundation for continuing growthof our rural iindustries. But the fact that we have been ableto succeed in the difficult world economic environment does notentitle us to be complacent.

We must re-double our efforts to prevent defective policiesand irresponsible economic management jeopardising thesignificant results of the last four years.

It is a salutory experience.to recall the problems confrontedby our rural industries, indeed all industries, in the Laboryears.

At that time, in separate 12 month periods:

Commonwealth budget outlays rose by 46%;

Federal award wages rose by 38%;

Farm unit costs increased by

SReal income per farm fell by over

SThe Australian beef industry was excluded fromJapanese markets; and

In early 1975, only a rank and file revolt preventedthe Labor dovcrnment from reducing the floor pricefor wool from 250 cents to 200 cents per kilo.

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Inevitably, under this assault, Australian industries either.collapsed, or were unable to compete internationally andavailable markets were lost.

Farmers still remember with great anxiety, the CoombsReport commissioned by the Whitlam Government.

Acting upon this, Labor cut a swath through assistance topeople in country areas, largely on the basis that suchassistance was not needed.

Such a look into the past reminds us that the foundationsof profitable industry are hard to build; easy to destroy.

It reminds us that hard-won gains can easily be squanderedand we have come too far to contemplate sacrificing'thebenefits that we have secured.

In the decade ahead, our efforts must be spent in consolidatingour advantages and building on our opportunities.

As always, there will be difficulties through drought,theworld economy, farm costs and the tendency towards variabilityin commodityprices all these will be severe enoughtests in themselves.

We cannot allow them to be complicated by Government extravaganceand incompetence which would deal to the rural sector thekind of body blow it experienced in the

Rural industries have much to gain from a well-manageddomestic economy.

We enter the 80s with the kind of economic stability andinternational competitiveness that suggests a decade of greatopportunity for Australian farmers.

The big industries of Australian agriculture wool, meat, sugarand wheat, have found long-term prospects.

The dairy industry is now much better placed to take advantageof market prospects.

Moreover, there are emerging industries the growing riceindustry, the developing oilseeds industry and a spectaculargrowth in cotton production.

When one realises that Australia's agricultural exports inthe last financial year represented more than 40% of Australia'stotal exports, then an understanding can be gained of theimportant social and economic benefits provided to the nationby rural industries.

This export success must be maintained.

We are well located geographically to meet any increase in foodimport demands of the high growth Middle'East and Asian markets.

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Global food security,particularly for increasingly importdependent developing countries, is likely to be a continuingpolitical issue in the

This grow-.ing import dependence of developing countriesreoresents a challenge for Australian agriculture thathistoricallv it has met; -and organisationally and economicallyit is caoable of meeting again.

In the 80s Australia will have an increasingly important roleas a net food and energy exporter.

The Government is determined to secure the economic environmentin which these roles can be fully and productively played out.

Inevitably, one of the challenges in any decade is the challengeof change. So it will be with rural industries.

There will be new domestic and international agriculturaldemands and new and rapidly developing markets.

It is through an industry-oriented organisation such as yoursthat these changes can be most beneficially accommodated.

Your initiatives and those of your parent body will be centralin the decade ahead in fashioning*the response of all Australianfarmers to the opportunities of the

In this task you can be assured of the constructive support ofthe Government.

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